Bank of America Recommends Wealth Management Clients Getting Up To 4% Crypto Exposure 

One of the biggest banks in the United States, Bank of America, has recommended that its wealth management client allocate up to 4% of their portfolios to crypto. According to the Bank of America, cryptocurrencies can play a small but meaningful role in a diversified investment strategy.

Bank Of America Recommends All Client Portfolios To Crypto Exposure

Bank of America (BofA), one of the Big Four banks in the United States, has encouraged its wealth management clients to start thinking about getting some crypto exposure in their portfolios. 

Beginning on January 5, Bank of America will offer four CIO-covered Bitcoin ETFs. The firm will offer Bitwise Bitcoin ETF (BITB), Fidelity’s Wise Origin Bitcoin Fund (FBTC), Grayscale’s Bitcoin Mini Trust (BTC), and BlackRock’s iShares Bitcoin Trust (IBIT). All its clients can now access these funds.

Beginning in January, the wealth management advisers of Bank of America will be allowed to recommend between a 1%-4% allocation to crypto assets. Chris Hyzy, the chief investment officer at Bank of America Private Bank, said in a statement that the lower end of this range may be best suited to investors with a conservative risk profile. 

However, investors with a greater tolerance for overall portfolio risk can adopt the higher end of the recommendation. It’s a major change for the bank, which previously allowed its clientele to invest as they wish, but did not allow its advisors to recommend crypto exposure.

All Bank of America Clients Can Now Access Crypto

The latest guidance from one of America’s biggest financial institutions is available through its Merrill, Bank of America Private Bank, and Merrill Edge platforms. Before the firm’s latest move, wealthy clients of the bank had access to crypto products only upon request. 

As a result, the 15,000 wealth advisers of Bank of America could not recommend crypto exposure, leaving many retail investors needing to look elsewhere for access. However, from January, they can now access Bitcoin ETFs.

While the bank does not suggest replacing traditional assets with crypto, it is encouraging investors to add digital assets to potentially improve returns. The recommended allocation will also help clients keep their risk exposure to digital assets at a manageable rate. 

The range also reflects consensus among financial giants. It brings the Bank of America in line with the wealth management platform standards found across other major institutions like BlackRock and Morgan Stanley.

Crypto Adoption is on the Rise in Wall Street

Reacting to the development, Nancy Fahmy, head of Bank of America’s investment solutions group, explained that it “reflects growing client demand for access to digital assets.” This is a trend that has been sweeping across Wall Street over the last few months. 

BofA’s latest move comes just hours after Vanguard, an asset management titan, reversed its long-standing policy, announcing that it will now allow its clients access to crypto ETFs. 

In October, Morgan Stanley’s global investment committee provided crypto allocation for crypto investors and financial advisers, suggesting 2%-4%. With the growing trend, other top financial institutions like Wells Fargo, Goldman Sachs, and UBS could look to delve into the crypto space.